PREFACE

Indeed, I must disclaim any originality for the views I put forward.

—JOHN RAWLS

Though it is difficult to pin down with any precision the provenance of ideas, I believe I can trace the origins of this book to a late-fall day in 1994 under a tree on The Lawn at the University of Virginia—Mr. Jefferson’s Academical Village. There are places in the world that simply feel like proper venues for scholarship; in the shadow of The Rotunda is such a place. There was a particular tree against which I would sit and read as I searched for a defensible moral foundation for stakeholder theory. I had come to Virginia’s Darden School to study stakeholder theory and my interest in the work of John Rawls rendered it something of a foregone conclusion that the focus of my studies would involve the confluence of these two. In the fall of 1994, I was reading Donaldson and Dunfee’s “integrative social contracts theory” articles and A. John Simmons’s Moral Principles and Political Obligations. I took (still take) Donaldson and Dunfee’s writings as exemplars for research in organizational ethics, but Simmons’s critique of tacit consent and the social contract methodology is a powerful one—I was stuck. In another example of the great good fortune that has attended my studies, the Simmons book also ix contained an extended treatment of Rawls’s principle of fair play. It was an epiphany. Here, under a tree on The Lawn I had found a locus for integrating those features that I believed necessary to a robust theory of organizational ethics. That day and the subsequent nine years have culminated in this book.

This book attempts to combine stakeholder theory and the moral and political theory of John Rawls into a single theory of organizational ethics. This task is both obvious and daunting for much the same reason: These theories can plausibly claim paradigmatic dominance in their respective fields. No approach to the examination of organizational ethics can claim a greater share of scholarly and popular attention than stakeholder theory over the past twenty years. No moral or political theory can claim greater twentieth-century influence than Rawls’s A Theory of Justice and subsequent elaboration. I was stunned to hear Rawls’s name uttered on television’s The West Wing in February 2003. Think about the last time you heard the name of a contemporary political philosopher uttered on a top-ten network television program and you will have some idea of Rawls’s influence.

A moment of reader guidance is perhaps called for here as the style of this book varies from chapter to chapter. The majority of the book can be understood by anyone familiar with the stakeholder concept while some of the material is quite dense and fairly technical. Understanding the technical and esoteric parts is not always necessary to understanding the remainder of the book, though leaps of faith may occasionally be required without such familiarity. The book is organized rather like a mountain—it is most accessible on the sides and is highest (in terms of the level of abstraction) in the middle. Chapters 1 and 2 should be palatable to academics and practitioners alike. An intuitive sense of the basic idea of a stakeholder and some of the attendant problems that can arise in the practice of stakeholder management are all that are required to appreciate these chapters. The same can be said of Chapters 6 through 8. Chapters 6 and 7, about stakeholder legitimacy and the natural environment as a stakeholder, require slightly greater familiarity with the stakeholder debates, but are still well within the grasp of a reader who is not well versed in the academic literature. Chapters 3 through 5, on the need for an ethics of organizations, the main points of contention in the academic stakeholder literature, and the defense of the principle of stakeholder fairness, will be of most benefit to those already familiar with more academic treatments of business ethics and stakeholder theory—though Chapter 4 may also provide a good point of entry into the scholarly debates that currently swirl if one is interested in an overview of the state of the art in stakeholder theory. It is not necessary to climb to the summit of a mountain to appreciate it. One can see the entire mountain without going over the pinnacle and there is often practical value in doing so. But from my experience, there is also a certain satisfaction in attacking the summit. The perspective on the landscape below is far superior and the views from the base are given greater context and meaning.

For any project of such duration, one is bound to compile debts. Good fortune has brought me into contact with so much encouragement and assistance that my debts are still greater. Foremost among my academic debts are those I owe to Ed Freeman and Pat Werhane. Their contributions to my ideas on business, ethics, organizations, food, wine, leadership, writing, and myriad other subjects cannot be overstated. Whatever the merits of this book, they can claim the largest part of the credit. More than this, these two have provided a constant source of both personal and professional support. They are role models and friends.

I would also like to thank the many people who have seen fit to read and comment on earlier drafts of all or part of this work. In addition to providing a part of the original inspiration, A. John Simmons consented to participate on my dissertation committee and provided many useful comments on the ideas herein. Maureen Bezold, George Brenkert, Marty Calkins, the late Max Clarkson, Tom Donaldson, Tom Dunfee, Heather Elms, Paul Glezen, Douglas Hammer, Ed Hartman, Barry Johansen, Michael Johnson-Cramer, Tom Jones, Andrea Markowitz, Eric Orts, Lee Preston, Tara Radin, Joel Reichart, Richard Rorty, John Rowan, Tim Rowley, Gordon Sollars, Alan Strudler, Ann Svendsen, Harry Van Buren, Andy Wicks, and Don Yates have all commented on the ideas at least once and in most cases several times during the process. Joshua Margolis has been the most consistent source of criticism, stimulation, and encouragement on this book throughout the process—his efforts on behalf of the material contained here are unsurpassed and deserve special recognition. The book would doubtless be far better had I been able to address all of the concerns these insightful individuals suggested. Any remaining shortcomings in the book are despite rather than because of their input. This responsibility is my own.

There is no better place in the world to study organizational ethics than the University of Virginia, The Darden School, and the Olsson Center for Applied Ethics. I am grateful for their support. Similarly, I would like to thank the students, faculty, and administration of the University of San Diego for their support of the study and practice of ethics in all areas of life.

I would also like to thank the staff at Berrett-Koehler Publishers and especially Steve Piersanti and Jeevan Sivasubramaniam. The company is an exemplar of the stakeholder approach advocated herein. Working with them has improved both the form and the content of the book and I am proud of my association with them.

Finally and above all I want to thank my family. Hoyte Smith, Robert Pinkerton, and Eric Phillips have taught me in various ways the value of hard work, education, and intellectual achievement. Myrtle Smith, Una Mullis, and Amelia Phillips have reinforced these virtues with an infusion of complete and xii unconditional love. And before he was even a person, the idea of Smith Phillips provided motivation when nothing else could. This book is dedicated to him.

Robert Phillips

San Diego, California

8 March 2003